It's just a pause, not a pivot, says Das on RBI's status quo

The surprise move to hold repo rate should not be seen as an indicator of carrying out similar moves in the future, and RBI will "not hesitate" in taking further action on rates if needed, Governor Shaktikanta Das said on Thursday.

"If I have to characterise today's monetary policy in just one line...it's a pause, not a pivot," Das told reporters in the customary interaction with reporters after the announcement of the policy review.

Earlier in the day, the six-member MPC unanimously decided to pause after repeated hikes in rate over the last 11 months, surprising analysts who were expecting the central bank to make a final 25 basis points hike before opting to pause. The benchmark policy rate (repo rate) is 6.5 per cent.

Das said the job to decisively bring down inflation is "not yet finished", and RBI's policy priority continues to be price stability.

RBI is keen to assess the cumulative impact of the rate actions done till now, he said. There has been a cumulative hike of 250 basis points since May 2022.

In his statement while announcing the policy review, Das pledged to hike interest rate again if needed, saying the decision to pause was "for this meeting only".

Speaking to reporters, Das reminded that RBI's target is to get headline inflation to 4 per cent from the 6 per cent levels at present, and the monetary policy will be working towards progressively aligning with the target.

Deputy Governor Michael Patra said RBI has marginally upped its FY24 growth estimate to 6.5 per cent primarily on assumption of a decline in the average oil price to USD 85 per barrel from USD 90 per barrel earlier.